On Thursday, May WTI crude oil (CLK26) closed up 3.46 (+3.66%) while May RBOB gasoline (RBK26) dropped 0.0052 (-0.17%). The mixed settlement was influenced by rising crude prices amid concerns over a potential US-Iran ceasefire, while gasoline prices fell following Israel’s decision to engage in direct talks with Lebanon. The Strait of Hormuz remains largely blocked, impacting oil flows and leading to a 6% production cut from Persian Gulf producers due to local storage capacity issues. Over 800 vessels are currently trapped in the Persian Gulf due to these restrictions.
Saudi Arabia’s energy infrastructure has been significantly impacted, with over 600,000 barrels per day of crude production capacity offline due to Iranian attacks. Saudi Aramco raised its main oil grade price to Asia by a record $17 a barrel for May delivery. Meanwhile, OPEC+ plans to increase output by 206,000 bpd in May, though this may be challenging due to ongoing conflicts and reduced capacity in the region. Current US crude oil inventories are 1.5% above the seasonal five-year average, and production fell to 13.596 million bpd.
The geopolitical climate continues to affect market dynamics, with ongoing hostilities in the Middle East and tensions from the Russia-Ukraine conflict influencing global oil supplies. Recent reports indicate an increase in active US oil rigs, signaling a slight rebound in domestic production efforts.
